When the nation's largest health insurer announced Tuesday it
will&nbsp;cut its losses and
(http://www.bloomberg.com/news/articles/2016-04-19/unitedhealth-profit-beats-estimates-fueled-by-tech-unit-optum) reduce its exposure to
Obamacare insurance exchanges to just a few states in 2017, it was a
sign of the fragility of the healthcare marketplaces, where some
insurers are struggling to make money.

Fearing massive financial losses, UnitedHealth Group said it would
sell health policies on exchanges in only&nbsp;"a handful"
of the 34 states it did in 2016.&nbsp;But there was one
notable&nbsp;exception.

When UnitedHealth pulls out of Georgia in 2017 it will leave one of
its insurers untouched: Harken Health, which sells plans in Atlanta. It
may be a small company, with a small pool of patients, but observers say
it also contains clues for how to succeed in a cutthroat and challenging
post-Obamacare world. It's a good thing United left Harken Health
behind, they say, because someday, it could prove to be the kind of
Obamacare success story that, for now, is rare.

"It'll be very interesting for us to see what will happen
with Harken," said Dustin Eggers, a principal at DRG Consulting in
Chicago. Harken serves a mix of different kinds of patients, but it does
so in an unorthodox way: Patients fall under the charge of a dedicated
"care team," for instance, and have unlimited, free primary
care visits. "If that doesn't work for the exchange
population, I don't know what will," Eggers said.

Harken Health began as a partnership between Boston-based Iora
Health and Minnesota-based UnitedHealth Group, which has invested $65
million in the independent subsidiary. In January, Harken began
(https://www.harkenhealth.com/content/dam/harken/pdf/insurance/2016-Harken-FAQ-PS003E-EN.pdf) operating six clinics in Atlanta and four in
Chicago and now serves approximately 35,000 patients.

&nbsp;

What distinguishes Harken from other health insurers? According to
the company,&nbsp;(https://www.harkenhealth.com/) it's the way
it creates relationships &nbsp;between doctors and patients. Harken
offers free primary care in the form of "unlimited visits to our
new and inviting Harken Health Centers," plus
a&nbsp;(https://www.harkenhealth.com/care) care
(https://www.harkenhealth.com/care) team that promises to "know
your story, not just your symptoms," and is available 24/7 by
phone, email or&nbsp;video chat, when not available in person.
Doctors are part of that team, as are health coaches and behavioral
health specialists. Clinics offer yoga, cooking classes and even
acupuncture. And in a major departure from other insurers, Harken pays
its doctors salaries, not fees tied to the number of patients seen, or
tests ordered.

But Harken's approach is a gamble. The amount it spends on
primary care is double that of the average insurer, Kaiser Health News
(http://khn.org/news/unitedhealth-tries-boutique-style-health-plan/) has
reported . If Harken Health is to see financial payoffs, they'll
likely come about in the long run, not immediately, because it could
take years, even decades, for those weekly yoga classes and cooking
classes to result in one's not developing diabetes.

"It's reasonably proven that if you overinvest in primary
care, you have lower downstream cost in the system," Harken CEO Tom
Vanderheyden once (http://www.modernhealthcare.com/article/20151116/BLOG/151119906) told Modern Healthcare.

If there's any assurance that Harken's idea will work, it
may be found in Kaiser Permanente, the well-regarded
California-based&nbsp;nonprofit that is a tightly knit system of
insurance and doctors, clinics and hospitals. Kaiser Permanente
(http://www.nytimes.com/2013/03/21/business/kaiser-permanente-is-seen-as-face-of-future-health-care.html?_r=0) got started in the mid-1940s, and
as with&nbsp;Harken, doctors are paid a fixed fee for patients that
helps keeps costs low. Advocates of Kaiser's&nbsp;model have
praised it for decades, such as in this New York Times article from
1989, "(http://www.nytimes.com/1989/07/02/business/why-kaiser-is-still-the-king.html?pagewanted=all) Why Kaiser is Still the King. "

Kaiser Permanente's model is not without its flaws, of course.
It has received criticism for long wait times for mental health
services, for example, and its membership in 2013 was no higher than at
its 1998 peak. In 2015, its profits
(http://www.bizjournals.com/sanfrancisco/blog/2016/02/oakland-kaiser-permanente-profits-bernard-tyson.html) fell nearly 40 percent, a drop that
corporate treasurer Tom Meier blamed on a poor return on investments
(operating revenue that year grew 7.6 percent&nbsp;to $60.7
billion).

But as health insurers struggle with financial losses, and blame
those losses on Obamacare patients whom they characterize as especially
sick and therefore expensive, they may also welcome a possible solution
that improves upon the status quo.

"Harken is a small and interesting innovation that we are
considering, and we will stay with it," UnitedHealth Group CEO
Stephen Hemsley (http://seekingalpha.com/article/3966325-unitedhealth-group-unh-stephen-j-hemsley-q1-2016-results-earnings-call-transcript?part=single) told analysts on an earnings call Tuesday. "It's in a
very modest pilot position," he added.
UnitedHealth&nbsp;(http://money.cnn.com/2016/04/19/investing/unitedhealthcare-obamacare-exchanges-aca/) reported losses of $475 million on
Obamacare exchanges in 2015, and could lose half a billion in 2016.

"Maybe Harken is being left there to see how it does,"
Eggers said. If it eventually produces the return on investment that
UnitedHealth needs to placate shareholders, maybe Harken will become the
brand for UnitedHealth exchange products,&nbsp;he suggested.

As for Harken's future, the company appears to be moving
forward one step at a time. CEO Vanderheyden
(http://www.startribune.com/unitedhealth-pullback-doesn-t-apply-to-harken-health/376466801/) said in an interview in March with the Minneapolis
Star-Tribune that the company plans to expand in 2017, but he did not
offer more details.

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